Drug Store Showdown: CVS vs. Walgreens
They’re not just for picking up prescriptions — the monster drug store chains CVS and Walgreens have morphed into a kind of convenience mini-grocery store, where customers can pick up laundry detergent, baby products, snacks, motor oil, or choose from a huge variety of other items. Many stores are open 24 hours. Both companies use customer loyalty programs to attract repeat customers, and both are working to draw in shoppers using local search.
CVS and Walgreens have both successfully expanded across the country with thousands of locations, but local search is affecting consumer choice in ways they might not have expected. CVS takes confident charge of some important connections to its customers, but Walgreens’ persistence on a wider playing field is giving the company an edge.
Round 1 – Data Quality
WHY WALGREENS WON: Accurate NAP (name, address, phone number) data led Walgreens to victory in the first round of October’s Brand Battle. More than 90 percent of CVS data on Yelp and Facebook was inaccurate, and across major online listings, CVS had claimed fewer locations than Walgreens. Walgreens’ NAP data quality showed the company’s attention to detail: Its NAP data inaccuracies were below 10 percent across Google, Bing, and Foursquare, and on Yelp, Walgreens’ data was 12 percent more accurate than CVS’. For this analysis, Brandify used location data obtained from a major core data provider. Only minor data cleansing was performed in order to ensure the analysis reflected how the data is distributed.
Round 2 – Local SEO
WHY WALGREENS WON: Walgreens barely beat CVS in this round, winning by just four points. Brandify analyzed four major components in the second Brand Battle round focusing on local SEO: local pages, locators, website optimization, and page rankings across Google Maps and Bing Maps. The search evaluation primarily addressed four key components that can make or break a local search: local pages, locator, website, and on-page factors. One on-page factor that pitted these two companies against each other was their page rankings results on Google Maps and Bing Maps for the keywords “drug store,” “pharmacy,” and “flu shot.” Any result out of the top 10 was considered “not found.” The term “drug store”x ranked the highest on Google for both brands, with Walgreens’ locations ranking in the first position 21 percent more often than CVS’ locations. On Bing, CVS locations ranked in the first position 29 percent more than Walgreens for the term “pharmacy.” In page rank and with local pages, the two brands might have tied, but Walgreens’ more optimized and user friendly website and locator enabled it to beat out CVS.
Round 3 – Reviews
WHY WALGREENS WON: A positive online reputation can drive customers to favor one brand over another, and the third round in the Brand Battle looks at how company reviews are helping or hurting the brands. Brandify conducted an analysis across six different types of experiences a customer could have at local CVS and Walgreens stores by looking at consumer sentiment with the following keywords: “pharmacy,” “flu shot,” “deal,” “coupon,” “friendly,” and “staff.” More than 40 percent of reviews for both brands were rated with 4-5 stars. However, when looking at consumer sentiment with these keywords, Walgreens customers were twice as likely to associate these terms with positive reviews than CVS’. CVS customers were also 2 percent more likely to rate a review with one star than a Walgreens customer. Based on reviews, Walgreens customers were more satisfied with their experiences, giving Walgreens a 3-0 lead over CVS so far.
Round 4 – Social Engagement
WHY CVS WON: A local-social strategy is crucial for all brands, especially for companies with thousands of locations across the country. CVS and Walgreens clearly employ two different strategies. Walgreens is present on more social media sites, while CVS focuses its attention solely on Facebook and Twitter. CVS proved to have a more effective strategy with its understanding of the platforms with which its customers are more engaged. CVS garnered more likes and comments on its social media posts than Walgreens, winning the fourth round in this Brand Battle by nine points.
Round 5 – Local Advertising
WHY WALGREENS WON: The fifth round shined light on a problem area for both brands: Neither CVS nor Walgreens is taking advantage of an optimized local advertising strategy. Both brands are attempting to add location information to their non-branded keyword list, but so far have only added city and state names with those campaigns. They’re also linking to corporate websites rather than harnessing the potential found in local landing pages. Neither brand is utilizing local pages in advertisements, which ultimately leads customers to pages that aren’t specific to their needs. Walgreens ended up winning this round by spending more money per month bidding on more keywords, bringing more than twice the monthly traffic of CVS.
Round 6 – Competitor Benchmarking
WHY WALGREENS WON: Benchmarking the top competition both nationally and locally gives brand managers the insights they need to better compete and win real estate across local digital search. Brandify performed a local search analysis using the phrase “drug store” with Google’s search engine, and determined CVS and Walgreens have about two additional competitors at the local level. Their top competition is each other, with Rite Aid and Walmart Pharmacy following. Walgreens wins in round one for data quality and round three for online reviews gave the company a strong lead against the local competition. Walgreens also won the sixth round for competitor benchmarking, coming out of the ring as the October Brand Battle champion.
Brandify Recommendations: CVS
CVS is putting forth significant effort, but came in second to Walgreens with its current plan. The company has the potential to expand its local customer base with a few upgrades to its approach:
1 – CLAIM LOCAL LISTINGS. While CVS’ local listings data quality is decent, there is significantly more opportunity in unclaimed locations. Claiming additional listings will improve the company’s data quality and help with customer retention.
2 – FORM A REVIEW RESPONSE STRATEGY. The reviews pillar was an especially close round between Walgreens and CVS. A strategy to improve reviews and respond to negative reviews would ensure more customer complaints are heard and addressed.
3 – CREATE HYPERLOCAL CAMPAIGNS. Advertising campaigns will benefit with links to local landing pages for more optimization.
Brandify Recommendations: Walgreens
Walgreens’ win in October’s Brand Battle was largely due to its consistent accuracy in local data listings and its local SEO strategy. But the company is struggling with local advertising, and Brandify suggests a new approach to the following areas:
1 – IMPROVE SOCIAL STRATEGY. Walgreens is reaching out to customers in too many places with too little effect. Creating a clear policy in a few channels and working toward extra engagement will help draw customers in.
2 – CREATE A REVIEW RESPONSE STRATEGY. Walgreens won this round by beating CVS by a score of 110 to 95, but 37 percent of Walgreens’ reviews were marked with one star. More attention to reviews will improve Walgreens’ opportunities to connect with customers and fix problems.
3 – CREATE HYPERLOCAL CAMPAIGNS. Both companies will reach a broader group of customers by targeting the communities located near their stores. Hyperlocal campaigns linking to landing pages will lead customers directly to their local Walgreens rather than providing general information.
October Brand Battle Winner: Walgreens
This pharmacy fight was scored using Brandify’s proprietary Social Data Matching (SDM) algorithms with data from multiple online channels,* including Google, Bing, Facebook, Yelp, and Foursquare. Data was entered into the Brandify analytics engine to test the two companies’ local digital marketing footprint to determine a final Brand Score for each.
The Brand Score is calculated with an algorithm that consists of 250 variables grouped into six pillars: Data Quality, Local SEO, Reviews, Social Engagement, Local Advertising, and Competitor Benchmarking.
CVS won only one of the six pillars, but that emphasized the company’s understanding of its local customers. The company’s win was based on its success in connecting with local customers on social media, while Walgreens’ strategy is less focused and earned the company fewer points in that category. In the end, Walgreens beat CVS in the other five pillars by 43 points, with its final Brand Score of 704 vs. CVS’ 661.
Street Fight and Brandify will publish a new Brand Battle each month.
*Other channel sources included in this analysis: Yellow Pages, MerchantCircle, Pinterest, Twitter, and YouTube.
Brandify is transforming the way businesses connect to consumers by leveraging location technology and offering unrivaled personal service. Brandify has helped hundreds of brands understand and improve their local presence. Current and past clients include In-N-Out Burger, True Value, Jo-Ann Fabrics, Applebee’s, Black & Decker, and more. For more information about Brandify, go to brandify.com.